Why opposing car companies need to put aside their differences and work together to develop affordable new models.

Best of enemies: Car companies joining forces

Collaborative efforts are the way of the future when it comes to developing expensive new models or even sourcing new engines, according to a leading Toyota executive.

The comments echo those of Mazda's global president and CEO Takashi Yamanouchi who said the company was looking to forge more alliances that aim to "bring a win-win and contribute to building our brand and helping our financial foundation".

"There are others [alliances] but they will be the subject of further announcements at an appropriate time," said Yamanouchi.

"Looking at our strengths or weaknesses by region or by technology or by product, we like to explore alliances and that would allow us to strengthen our company."

However, he said any such alliances would not involve capital investment, with Yamanouchi saying the brand's only automotive partner with a financial stake in the business would remain Ford. Ford previously had a controlling interest in Mazda, something it has since sold down to a reported 2 per cent.

"We still have an agreement with [Ford] that we would mutually consider each other strategic partners," said Yamanouchi.

"In terms of an alliance it will not involve capital alliance but we will be focused on relationships that will complement each other's strengths and weaknesses in terms of region, technology or individual products."

Earlier this year Mazda announced a deal with Alfa Romeo that would see the two brands jointly develop a new roadster, which in Mazda's case would be the replacement for the long running MX-5.

While the MX-5 is the world's best selling roadster, it is comparatively low volume, typically selling between 20,000 and 40,000 each year globally.

The Fiat/Alfa Romeo deal is not dissimilar to that recently embarked on with Subaru and Toyota to create the BRZ and 86 twins, although Mazda and Alfa Romeo plan to better differentiate the cars. Whereas the Subaru and Toyota are almost identical twins, the Mazda/Alfa Romeo roadsters would use different engines and designs, while sharing underbody components and a production line.

Toyota and BMW also recently announced the two giants would jointly develop a larger sports car.

And it's not just complete cars that are the subject of alliances. Car makers around the world are increasingly co-developing engines to be shared among multiple brands. A 2.0-litre turbocharged four-cylinder, for example, is used in vehicles as diverse as the Ford Falcon, Range Rover Evoque, Jaguar XF and Volvo S60.

Matt Callachor, Toyota Australia's director of marketing, concedes his company cannot justify the cost of going it alone to develop a diesel engine for models including the latest Corolla launched this week.

Sales of diesel engines in Australian passenger cars total about 8 per cent of the market, prompting Toyota's product planning manager, Greg Gardner, to declare: "Diesel goes really well in trucks and SUVs."

However, Callachor says a recently-announced alliance between the affordable Japanese brand and high-end German prestige car maker BMW to share engine and battery development could result in access to an affordable diesel engine for Toyota.

"I actually hope [the alliance] succeeds because there could be the opportunity to get some mass-production diesels that would suit in terms of price," he says.

The clearest example of the benefits of collaboration can be seen in the alliance between Toyota and Subaru with the 86 and BRZ.

The near-identical models set a new benchmark for affordable performance after the two Japanese brands split the costs of design, engineering, research and development.

"That's partially what happened with the 86, with the collaboration with Subaru. That's one of the learnings out of it that both manufacturers can take advantage of," Callachor says.

While car makers have long been sharing products, the latest alliances are different to the "badge engineering" that was popular in the 1980s and '90s, whereby one brand would buy another's and replace the badges; the Holden Commodore, for example, was marketed by Toyota as a Lexcen.

Drive asked Mitsubishi global president Osamu Masuko, visiting Australia recently for the Sydney motor show, whether he would consider forming a joint venture to emulate Toyota and Subaru's success and build a modern successor to the Mitsubishi FTO small sports car of the 1990s.

Via an interpreter, he indicated that while his engineering team was keen to embark on such a project, he could not afford it because "we would like to do it by ourselves".